UK

Demand rises for #education in Islamic finance

The increasing economic importance of banks in Muslim-majority countries has made Islamic finance a useful skill. The globalisation of business education means that many schools now have campuses in countries where Islamic finance is a significant part of the local banking sector. British higher-education institutions lead the non-Muslim world in the teaching of Islamic finance, with longstanding courses run by London Business School, Durham, Aston, Bangor, Salford and Cass Business School. More than 60 institutions in the UK now teach Islamic finance, up from fewer than 10 a decade ago. London Metropolitan University is the latest UK institution to add an option to learn about the subject, relaunching its MBA in January with Islamic finance.

Christians and Muslims work together on pioneering ethical finance plans

The Church of Scotland and Islamic Finance Council UK are meeting at a private round table in the British Parliament. As part of the interfaith initiative for a more socially responsible financial system, faith leaders, parliamentarians and finance practitioners gather to agree a shared values framework. The joint venture was launched earlier this year in response to the systemic failure and non-sustainability of the current financial model. The event is the second in a series of three workshops. The first reviewed the theological and philosophical underpinnings of Christianity and Islam in order to identify commonalities. At the second workshop the shared values framework will be reviewed and refined before participants explore the practical obstacles to realising ethical finance. Omar Shaikh of the Islamic Finance Council UK said that bringing the debate to the heart of London sends a strong international message that faith communities can work together for the greater good of society.

#UK lifts sanctions on key #Iranian bank

The British government has announced that it has removed Bank Saderat Iran (BSI) from its list of sanctioned entities. The decision to delist the bank was in line with the amended regulations by the European Union regarding the lifting of sanctions against Iran. The regulations required the sanctions against the BSI to be maintained until 22 October 2016. Britain has previously lifted sanctions against three other Iranian banks. In January, the Bank of England announced that it had reactivated the licenses of Melli Bank, Persia International Bank and Bank Sepah International. This followed the implementation of a nuclear deal between Iran and the P5+1 group of countries. Iran agreed to restrict certain aspects of its nuclear energy activities in return for measures by the P5+1 to remove certain economic sanctions imposed against the country.

First Sharia-compliant Lloyd’s #syndicate set for launch

Cobalt Insurance and Capita Managing Agency have received approval from Lloyd’s of London to launch the first Sharia-compliant syndicate of the specialist insurance market. Once it gets full approval, the new Lloyd’s business will be named Cobalt Syndicate 1438, which is the Islamic calendar’s number for the year 2017. Cobalt founder Richard Bishop said the aim of the syndicate was to look to underwrite new business from emerging markets and working with others in Lloyd’s to extend their participation in those markets. Cobalt will start underwriting in the first quarter of 2017 with initial focus on developing a property and specialty-focused book of commercial business from emerging markets in the Middle East, North Africa and Asian regions.

Brexit minimally impacts Islamic investments in UK – economic expert

According to leading expert on Islamic Finance, Mehmet Asutay, Brexit may have some effect on real estate investments in the UK but London will continue to remain the centre for Islamic investments. Asutay noted that if Islamic finance continues to invest in real estate in the UK, they might find another hub in Europe rather than the UK. He said that having a large amount of liquidity, the Gulf region has contributed to expansion of Islamic financing and he called for expansion of Islamic financing in other developing countries. Professor Asutay said that in Europe, the UK and Luxembourg have been developing strategies to become important centres for Islamic finance. But the UK is also aiming to become an important centre for teaching and learning Islamic Economics and Finance.

deVere Mortgages & Al Rayan Bank partner on Sharia-compliant mortgages

deVere Mortgages and Al Rayan Bank have announced that they have entered into a strategic partnership to offer Sharia-compliant mortgage alternatives. The alliance follows deVere Mortgages’ reporting of an average 55% increase in mortgage enquiries since the UK’s EU referendum, with the majority of these applications from people living in Qatar, the United Arab Emirates, Saudi Arabia, Kuwait, Bahrain, and Oman. Mike Coady, Managing Director of deVere Mortgages said the tie-up with Al Rayan Bank would add real value to their core market, which is Muslim and non-Muslim buyers based overseas who are looking to purchase property in Britain. Sultan Choudhury, CEO of Al Rayan Bank added that deVere Mortgages would help to reach an even wider group of people who are looking for ethical, Sharia compliant home and property finance.

#UK P2P Finance Association Releases Major Research on Economics of Peer to Peer Lending

The UK Peer to Peer Finance Association (P2PFA) has released a commissioned study on the economics of the peer to peer lending market in the UK. The study focused specifically on the eight-member platforms of the P2PFA which collectively comprise over 75% of the UK market. Reinder van Dijk, Partner at Oxera consulting, called peer to peer lending a 'real innovation' bringing benefits to both borrowers and investors. According to the report, P2P lending has created additional competition and choice in the market for loans and investment. P2P lending provides new options for retail investors, opening up access to risk-and-return from an asset class of consumer and business loans with net returns of between 4% & 8%. P2P lending does not create systemic risk, P2PFA member platforms provide a level of transparency which empowers investors.

Proposed economic crime offence may lead to senior manager prosecutions, say lawyers

Lawyers have warned that failure to prevent economic crime could lead to more senior individuals being prosecuted for misconduct. The UK government's proposed legislation could lead to deferred prosecution agreements with the Serious Fraud Office. The involved companies would potentially give evidence against individuals implicated in misconduct. According to Judith Seddon, partner at Clifford Chance, the corporate criminal liability will provide for an additional serious consequence of failing to satisfy existing requirements for anti-money laundering and financial crime prevention.

Bank of England fines QIB’s UK unit nearly $2m

The Bank of England has fined Qatar Islamic Bank’s UK, a subsidiary of Qatar Islamic Bank, for failings in reporting its financial resources to the regulator in 2011 and 2012. The Bank’s Prudential Regulatory Authority (PRA) imposed a fine of 1.385 million pounds ($1.95 million) on QIB for failing to undertake a regular assessment of its capital. Guy Priestley, QIB UK’s interim chief executive, said the problems identified by the PRA have been remedied.

Investcorp hosts leadership program for young Arab business leaders at University of Oxford

Investcorp organised its annual Investcorp Leadership Program at the University of Oxford’s Saïd Business School. The four-day program, held between 29 March and one April 2016, was attended by 41 aspiring young business leaders from the GCC. The program officially began with a keynote address by Mohammed Al Ardhi, Executive Chairman of Investcorp, who spoke about the importance of innovation and entrepreneurship. Faculty from Oxford Saïd delivered a series of interactive sessions on shaping the markets in which companies operate, embedding entrepreneurship in organizations and scaling family businesses. Demonstrations of the latest research in bioresearch and microscopy were also organised at the University’s Advanced Bioimaging Unit.

Gatehouse launches residential property finance offering

Gatehouse Bank plc has announced its entry into the residential property finance market. With a focus on greater London, Gatehouse will offer Shariah-compliant financing solutions for clients seeking to acquire or refinance residential properties. This new product was developed following strong client demand for residential property finance solutions. Gatehouse will offer clients bespoke property finance products, from simple single residential investment finance to more complex company structures including property portfolio and short lease finance. Abdulaziz AlDuweesh, Chief Investment Officer of Gatehouse sees significant opportunities to grow Gatehouse's presence in this market.

GFH signs £100 million deal for Northacre's 1 palace street

GFH Financial Group (GFH) has signed an agreement with Palace Revive Developments Limited worth £100 million to be a partner in the No. 1 Palace Street development in central London, a project being developed by Northacre. Under the agreement, GFH will become an anchor partner for more than 30% of the units in the development, which is located opposite Buckingham Palace. Located in Buckingham Gate, No. 1 Palace Street includes 271,051 square feet of space adjacent to Buckingham Palace in the area between St James's, Mayfair and Belgravia, the development of 72 luxury apartments, a restaurant and health centre. The development is expected to be completed in 2018.

Scottish ‘Kirk’ ?joins Islamic faith on cash and morals

The Church of Scotland has joined forces with Islamic finance experts to draw up a “practical ethical financial solution” to help the poor while sticking to the principles of both faiths. The agreement, which was announced on Tuesday, marks an unusual attempt to promote cross-religious financial innovation. Backers say it is too early to say what “solution” the initiative could yield, but possibilities include the creation of a new financial institution with cross-faith legal articles. The Scottish initiative is supported by international Muslim clerics and experts including Lamido Sanusi, a former Nigerian central bank governor famed for cleaning up the banking sector and now one of the country’s highest Islamic authorities.

Islamic bank BLME to acquire SME-focused leasing business

Bank of London and The Middle East (BLME) said it would acquire Renaissance Asset Finance as part of efforts to grow its leasing business. Dubai-listed BLME said in a statement the acquisition would be finalised in early April, without disclosing a deal size. The Islamic lender helped launch Renaissance in 2014 when it provided a financing line of 35 million pounds, with both firms seeking to fill a funding gap for mid-sized companies. Renaissance offers financing solutions including sale and leaseback transactions, with a maximum advance of 2 million pounds.

BoE to set up Shari'a-compliant facilities for Islamic banks

A new Bank of England consultation, which closes on 29 April, builds on a feasibility study carried out last year and sets out two possible deposit facilities, and two possible liquidity insurance models. The idea behind the proposals is to help firms that are prevented by Shari’a law from undertaking activities involving interest to manage fluctuating liquidity demands and ride out periods of particular stress. Although the consultation sets out options for both Shari’a compliant deposit facilities and liquidity insurance, the Bank of England said that it was prioritising the former as the area of greatest demand. Following the consultation and further analysis, it will decide whether any of the proposals are feasible, it said.

The Nottingham's finance director wins top accolade at British Muslim Awards

Ashraf Piranie, deputy chief executive and finance director at The Nottingham, has received an accolade for his contribution to finance and banking at the British Muslim Awards. Mr Piranie joined the board of The Nottingham in 2007 and was previously the finance director and joint managing director at the Islamic Bank of Britain and director of finance at Alliance & Leicester Plc. One of his most notable achievements was the proactive part he played in introducing Islamic finance legislation to the UK's Finance Acts. He continues to play an important role on UK banking regulation and since 2013 has been a member of the PRA's Practitioner Panel representing the building society sector.

The rise and rise of Islamic finance law

Contrary to popular opinion, Sharia law is not taking over Britain. It is seen as a rule of law that contributes to the way Muslims live. Most importantly, the principles of Islamic finance encourage fairness. The presence of the likes of Allen & Overy, Hogan Lovells and Norton Rose Fulbright shows how far Islamic finance has come. The unwavering investment that has occurred over the Middle East, with offices springing up in Saudi Arabia, Oman, Qatar, United Arab Emirates and Kuwait is a testament to firms taking the Islamic practice seriously. Trainees can develop leadership skills by undertaking research and ascertaining what works for clients.

The Sharia-run Government buildings where alcohol is BANNED thanks to Islamic finance deal

The central London offices must be run in line with Islamic principles because of a deal with rich Middle Eastern investors. They demanded the buildings be audited by Muslim scholars and subject to special rules in exchange for lending the Government £200million. The deal currently only covers three buildings - Richmond House, Wellington House and a property on Whitehall - and is almost unheard of outside of the Middle East. But Treasury officials hope hundreds of Western companies will follow their lead and turn over buildings to Islamic financiers in similar deals. The exact restrictions under which the buildings must be run which were not spelled out in the text of the deal struck with overseas investors.

Ibdar makes £8 million investment in prime new Manchester city centre development

Bahrain-based Ibdar Bank has announced that it has made a £8 million investment in a prime new residential project. Angel Gardens, consisting of residential 458-apartments and a total development value of £124 million, forms part of the wider NOMA re-development project aimed at transforming Manchester city centre. The development is being funded through a combination of equity invested by Ibdar and other co-investors and senior debt to be obtained from one of the Banks. Forecasts indicate an expected income return through operations starting at 9.1% on stabilized income, rising to 10.8% per annum after three years of stabilised operations and a targeted IRR of +15% over a five year investment period.

Will my Sharia-compliant savings be tax-free from April?

Fixed term deposit accounts, which pay an “expected profit rate” instead of interest, beat the best fixed rate bonds when it comes to earnings. HM Revenue & Customs (HMRC) confirmed that profits from Sharia accounts would count towards the personal savings allowance. Where returns are the economic equivalent of interest (and meet certain other criteria) they are taxed as if they are interest - and will be included within the definition of savings income, according to HMRC. This means Sharia compliant savers will be able to take advantage of the new £1,000 tax free interest earnings allowance if they are a basic rate taxpayer (£500 for higher rate taxpayers).

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